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2024 (8) TMI 847 - AT - Central ExciseValuation of physician samples - whether it is under Section 4(1)(a) or cost construction method proportionate to MRP in terms of Section 4(1)(b) - HELD THAT - The issue is no longer res-integra as the same has been decided in the appellant s own case vide various orders of this Tribunal. One of such order is SUN PHARMACEUTICALS INDUSTRIES LIMITED, UNIMED TECHNOLOGIES LIMITED) VERSUS C.C.E. S.T. -VADODARA-II 2023 (9) TMI 913 - CESTAT AHMEDABAD where it was held that ' When we find that price was charged by the assessee from the distributors, the show cause notice is clearly founded on a wrong reason. The case would squarely be covered under the provisions of Section 4(1)(a) of the Act. In view thereof, the Central Excise Rules would not apply in the instant case.' In view of the above decision of this Tribunal along with other orders of this Tribunal, the issue stand settled in the appellant s case. Accordingly the demand is not sustainable hence the impugned orders are set-aside - appeal allowed.
Issues: Valuation of physician samples under Section 4(1)(a) or cost construction method proportionate to MRP in terms of Section 4(1)(b).
Analysis: The judgment of the Appellate Tribunal CESTAT Ahmedabad, delivered by Hon'ble Mr. Ramesh Nair and Hon'ble Mr. C. L. Mahar, addressed the issue of valuation of physician samples under Section 4(1)(a) or Section 4(1)(b) of the Central Excise Act. The appellant's counsel, Ms. Nidhi Nawal, argued that the issue had been previously decided in the appellant's favor by the Tribunal and affirmed by the Hon'ble Supreme Court in a related case involving Sun Pharmaceutical Industries Ltd. The Revenue, represented by Shri Anoop Kumar Mudvel, reiterated the findings of the impugned order. Upon careful consideration, the Tribunal found that the issue was no longer res-integra as it had been conclusively settled in the appellant's case through various orders of the Tribunal. One such order, dated 12.09.2023, highlighted that physician samples, not meant for sale but for free distribution to physicians, should be valued under Section 4, where excise duty is payable on the transaction value. The Tribunal referred to Section 4(1)(a) of the Act, emphasizing that the transaction value between the assessee and distributor should be considered for valuation, irrespective of the final recipients of the samples. The Tribunal rejected the Revenue's contention that since the physician samples were given free of cost to physicians by distributors, the case did not fall under Section 4(1)(a). It clarified that the crucial transaction occurred between the assessee and distributors, where a price was charged, making Section 4(1)(a) applicable. The Tribunal held that the decision rendered by the CESTAT correctly interpreted the law, dismissing the Revenue's appeals based on the incorrect premise that the samples were not sold by the distributors to physicians. Ultimately, the Tribunal concluded that the issue had been definitively settled in favor of the appellant based on previous orders and the Supreme Court judgment. Consequently, the impugned orders were set aside, and the appeals were allowed, affirming the valuation of physician samples under Section 4(1)(a) and rejecting the Revenue's arguments.
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